Legislature(1999 - 2000)
02/25/2000 09:03 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 250
"An Act making and amending capital, supplemental, and
other appropriations and re-appropriations; making a
re-appropriation under art. IX, sec. 17 (c),
Constitution of the State of Alaska, from the
constitutional budget reserve fund; making
appropriations to capitalize funds; ratifying certain
expenditures; and providing for an effective date."
DEPARTMENT OF HEALTH & SOCIAL SERVICES
Adult Public Assistance (APA) AS 47.25.430-615, Sec. 10(a)
- $440,500 General Fund
JANET CLARK, Director, Division of Administrative Services,
Department of Health & Social Services began with Section
(10) of SB 250. She noted that the Governor used a low
case scenario of a four-percent growth for this program.
She then went on to outline an historical growth rate for
this program and gave some background on the population of
adults served, essentially noting that this program is a
cash supplement to Social Security Disability Insurance
(SSI.)
Co-Chair Torgerson asked if this program money was
considered a co-pay.
Ms. Clark responded that this program consisted of cash
payments and was not considered as a co-pay for medical
benefits.
Co-Chair Torgerson asked if this was a nationwide program.
Ms. Clark responded that most states provide a supplement
to SSI.
Senator Phillips asked if the supplementals were broken out
by election districts.
Ms. Clark responded that on page four of the backup
materials, the department provided a fact sheet on Adult
Public Assistance to highlight the corresponding
demographics [in Committee file.] She continued that
although there is a general five-percent caseload yearly
increase, about two to three percent consists of the
elderly, and seven percent consists of the disabled.
Senator Leman referred to the provided backup and read,
"Continued APA funding provides critical assistance as the
program of last resort for this population." He noted that
the state ought to encourage as the first resort: families,
friends, neighbors, and church groups, etceteras as
providing necessary support to these individuals. He
wondered if the state fails by providing a back stop of
first resort, rather than last resort, if these individuals
are relying on these programs for the remainder of their
lives.
Ms. Clark responded that the Adult Public Assistance
program does not consist of the same population as the
Welfare Reform Program. She noted that the state has
qualified for federal grants to help fund the research of
policies that relate to individuals being able to work
without loosing their Medicaid benefits. She continued to
note that the department has focused on welfare reform for
the past few years, but this program consists of disabled
adults based on SSI standards, where an individual must be
elderly and poor, or blind. She stressed that these
individuals are unable to work and need these funds for
utilities and rent payments.
Co-Chair Torgerson asked if anything was excluded from
these qualifying individual's incomes such as the longevity
bonus or the permanent fund dividend.
Ms. Clark responded that the state has "hold harmless"
provisions in its statutes for both the longevity bonus and
permanent fund program. She stated that the $929.00
qualifying income for an individual does not include these
benefits.
Co-Chair Torgerson asked if individuals re-qualify every
year for these benefits.
Ms. Clark responded that she would provide this information
to Co-Chair Torgerson
Senator P. Kelly stated that public policy was driving most
of what is listed on this supplemental budget. He added
that the only way to change this was through statutory
changes.
Co-Chair Parnell read the following sentence from the APA
formula obligations as provided in the backup materials.
"Alaska statutory provisions creating the APA financial
commitment, do not permit the department to implement a
ratable reduction of the APA maximum payment schedule." He
asked where this reference was in statute.
Ms. Clark responded that this was included in AS 47.25.430
(e), as follows: "provides the amount of state assistance
and eligible individual receipts must be maintained at the
1992 level."
Co-Chair Parnell asked if these levels were set forth in
regulation.
Ms. Clark responded affirmatively.
Co-Chair Parnell referred to this same statute, under
Subsection (a), which states, "Financial assistance shall
be given under these sections, so far as is practicable
under appropriations made by law." He noted that there was
no established formula for this in statute.
Ms. Clark responded that in the past when a proposed
ratable reduction was requested, the Attorney General's
office advised the Department that this would be
questionable by doing so without legislative action.
Co-Chair Parnell added that he was under the impression
that this program, was primarily driven by the elderly. He
then cited this population by age as outlined in the
backup.
Ms. Clark responded that when someone turns 65 years old,
they are counted as elderly and not as disabled.
Co-Chair Parnell continued to discuss this age breakdown
and noted a discrepancy in the numbers of individuals
accounted for. He then asked what the department paid to
an individual while they wait for an eligibility
determination on SSI.
Ms. Clark responded that she would provide this information
to Co-Chair Parnell at a later date.
Old Age Assistance - Alaska Longevity Bonus Hold Harmless
(OAA-ALBHH) AS 47.45.120, Sec. 10 (b) - $292,200 General
Fund
Ms. Clark continued that this program was created to allow
low income, elderly Alaskans to receive the same benefits
from the longevity bonus payment, while holding them
harmless from loosing their federal SSI, as well as their
state adult public assistance payment. She added that each
month about 1500 elderly adults receive this benefit. She
referred to page five of the corresponding backup and gave
particulars of how this program works, including an
explanation of why additional monies are necessary. She
summed up that the department needed a higher supplemental
than there is an increment request.
Senator Phillips noted that the legislature had passed the
Governor's bill on longevity and assumed that this
supplemental would have no affect on that.
Ms. Clark responded that the department had reflected a
reduction of this program in their fiscal note. She stated
that she would let Senator Phillips know how much of a
reduction was reflected.
Senator P. Kelly asked if the Governor's bill was income
based and wondered how this would impact individuals with
$60,000 or $80,000 incomes who would not be eligible for
services, which the department is trying to offset.
Ms. Clark responded that the Governor's bill was income
based and noted that in theory Adult Public Assistance is a
needs based, income based program for poor elderly. She
added that if this changed and the longevity bonus became a
needs based, she thought there would be some changes in how
the department would not hold people harmless.
Catastrophic and Acute Medical Assistance (CAMA) AS 47.08,
Sec. 10(c) - $608,600 General Fund
Ms. Clark noted that this was a relatively new program,
which separates out medical services for the very poor and
replaces the General Relief Medical Program. She referred
to the corresponding backup, which highlights eligibility
rules and she touched on some of these for the Committee.
She continued that the Governor's request was $500,000 more
than what the Conference Committee supported; however the
Senate Finance Committee supported the higher number last
year. She noted that the original request was reduced and
pointed out that the pharmacy costs related to this
program, is what drives the budget request. She added that
the department estimates 1,145 individuals will access this
program in FY00 and a little over 900 of these will use the
pharmacy benefit.
Senator Phillips referred to this program's income limits
and asked if there were any related exclusions, such as the
permanent fund dividend.
BOB LABBE, Director, Division of Medical Assistance,
Department of Health & Social Services responded that he
would research this for the Senator. He noted that service
payments are made directly to the providers, but the
recipients are allowed a certain amount of income, although
it is a very small amount.
Co-Chair Parnell asked if any unallocated reductions to the
department programs gets allocated to the CAMA program for
FY00.
Ms. Clark responded that she would research this
possibility.
Foster Care AS 47.14.100, Sec. 10(d) - $3.7 million
(Federal Receipts & General Fund)
Ms. Clark stated that an amendment to this original request
was given to the Committee, which reduced the amount of the
supplemental by about a million dollars. She noted that
when the department originally looked at the Foster Care
budget, they took into consideration the growth rate of new
children entering the program, along with an increase of a
daily rate of $3.00. She stated that the department
researched this increase and found that more money is paid
for infant care and teenagers, along with a geographic
differential. She concluded that more infants were
entering the system than previously and they found that
their original formula was flawed. She noted that as a
result of this, they backed down this amount.
Co-Chair Parnell recollected that an increase in last
year's budget went towards Foster parent rates.
Ms. Clark responded that last year the department attempted
to keep up with the amount of children entering the system,
but that there was no rate increase. She added that there
was a rate increase codified in regulation a few years ago.
GLADYS LANGDON, Children Services Manager, Division of
Family & Youth Services, Department of Health & Social
Services testified via teleconference from Anchorage. She
spoke to the increase of infants into Foster Care due to
domestic violence.
Subsidized Adoption AS 13.26.062, AS 25.23.190-240, Sec.
10(e) - $408,900 Federal Receipts
Ms. Clark continued that this requested money was for the
subsidized adoption program to cover caseload growth and
the department has undertaken to enhance their ability to
claim additional Federal Title 4 (e) Funds. She noted that
the department originally thought this would be a general
fund request, but these federal receipts can be earned to
make up for the projected shortfall in this program. She
continued that this program was for children with special
needs or those that are difficult to place. She added that
this program allows for a small stipend to adoptive
parents.
Senator Leman referred to page 13 of the backup and read
that there were 752 children classified as racial or with
ethnic factors. He asked what this specifically meant and
whether these were children that were additionally
difficult to place.
Ms. Clark responded that she did not know for certain, but
would research this for the Senator.
Senator Green asked if these special needs children qualify
for a larger stipend in an adoptive home, rather than their
own home.
MS. Clark responded that this was a good question, but that
she did not have an answer for it. She did note that the
subsidized and guardian payments were contractual
arrangements between the state and the adoptive parent.
She added that these payments were on average about half of
what the department pays for Foster Care. Ms. Clark stated
that she would provide the information, which Senator Green
specifically requested.
Senator Phillips noted that out of a total of 1,095
children, a third of them were either Fetal Alcohol
Affected (FAE) or Fetal Alcohol Syndrome (FAS) and asked
what the department is doing about a problem that is mostly
preventative.
Ms. Clark responded that U.S. Senator Ted Stevens provided
$6 million dollars for the next five years to establish a
State of Alaska FAE and FAS program. She noted that this
could lead to statutory changes regarding this problem.
Co-Chair Parnell noted that the department made this
request in Legislative Budget & Audit (LB&A) in the form of
a Revised Program for the Legislature (RBL), as well as in
this supplemental. He asked if there was any indication
from LB&A when this will be taken up or which avenue they
are really pursuing.
Ms. Clark responded that the department had put four of
these supplementals (federal only) into the LB&A process.
She added that the department is a bit confused about how
the legislature wants to consider these budgets. She
continued, that as a result of this confusion, the
department chose both avenues depending on what might be
the most expedient.
Frontline Social Workers, Sec. 10(f) - $261,800 Federal
Authority
Ms. Clark offered that this request was to deal with some
unexpected increases in this program's basic operating
cost. She noted a list of various reasons why this money
was necessary on page 18 of the provided backup. She
specially noted that in the past the department has lapsed
significant dollars in personal services related to this
program, although the department is not doing this anymore.
She added that the department holds positions vacant to
live within their vacancy assessment of 7 percent. She
noted that the department does not have the flexibility to
transfer funds from personal services as the department has
in the past to take care of unexpected costs.
Ms. Clark outlined that the department had to enhance
security services in their Anchorage office since some
clients had brandished guns and made threats. She added
that the department contracted with a security company on
site. She gave various other examples of unexpected costs
and added that this program's federal funds came to the
program as part of the Temporary Assistance for Needy
Families (TANF Block Grant.) She offered that one of the
transfers allowed under another federal source is called
the Social Services Lot Grant, presently this is all
budgeted towards to the Frontline Social Workers program.
McLaughlin Youth Center, AS 47.14, Sec. 10(g) - $120,000
General Funds
Ms. Clark offered that an overcrowding situation has
persisted at this facility over the years, especially in
their detention unit. She added that this results in more
overtime costs, including commodity purchases such as food
and clothing for children housed in detention. She added
that other unexpected costs were due to clients with mental
health needs that required one-on-one supervision. She
continued that this also resulted in an overtime situation.
She outlined other reasons why there was a shortfall of
money for this program.
Tape: SFC - 00 #37, Side B 9:50 am
Co-Chair Parnell asked what the department budgets for in
overtime hours.
GEORGE BUHITE, Director, Division of Juvenile Justice,
Department of Health & Social Services responded that the
department keeps averages of how many hours of overtime are
necessary to keep their facilities running. He stated that
overtime hours were hard to predict and gave examples for
the month of July of overtime at $37,000 and for January
$101,000 for this past year. He noted that overtime costs
fluctuate between these two extremes. He explained that
the department tries to stay within their budget and if
they leave positions vacant, while the population spikes,
this is problematic because there is not enough ready
staff. He pointed out that for every eight to ten
detainees, another post must be added. He noted that
overtime costs are included in the overall budget.
Co-Chair Parnell used the example of Public Safety and how
they budget at least six to ten hours a month per trooper,
and if there is an aberration they are able to account for
this. He asked how much the unallocated reduction was
allocated to Bethel's youth detention facility.
Mr. Buhite responded that the department's portion of the
unallocated reduction for the Division of Juvenile Justice
last year was $250,000. He noted that $108,000 of this was
allocated against McLaughlin, $50,000 for the Fairbanks
Youth Facility, $50,000 for the Johnson Youth Facility, and
a reduction of a part-time clerk position in Southeast. He
stated that none of these funds were allocated to the
Bethel facility. He noted that when it came time to take a
reduction, he applied these as such to those facilities
that could absorb it. He felt as though this facility
would not be able to handle such a reduction.
Senator Phillips referred to the spikes in population and
asked if there was a pattern of when these occur.
Mr. Buhite responded that there has been an historic
pattern with a building in the fall, which peaks around
Christmas.
Senator Green asked Mr. Buhite to refresh her memory,
regarding family medical leave.
Mr. Buhite responded that if an employee has a situation in
their family or a personal injury, this employee can take
leave beyond the standard leave allowed.
Ms. Clark added that these employees can take up to 18
weeks under the state's family medical leave provision.
She noted that if they use this leave, the employee is
still paid out of the department's budget, as long as the
hours are accrued.
Senator Green asked about a situation where as many as
eight employees at McLaughlin were on family medical leave.
Mr. Buhite responded that McLaughlin has a very stable, but
aging work force. He added that some of them have elderly
and dying parents to care for. He also noted that as some
employees get older, they are more apt to have injuries
from trying to restrain detainees, and such.
Bethel Youth Facility, AS 47.14, Sec.10(h) - $97,000
General Fund
Ms. Clark offered that this supplement was related to the
size of the resident population in the detention unit. She
added that this supplemental was comprised of $73,000 in
additional overtime and $24,000 in additional commodity and
food related expenses for detainees. She noted that in
September of 1999, the facility housed five residents
adjudicated for murder, attempted murder or conspiracy to
commit murder. She added that this facility is very small
and that these individuals took special care and attention.
Mr. Buhite explained how overcrowding affects these
facilities and their corresponding programs. He noted that
last week they averaged 17 to 18 young adults on an eight-
bed unit and in the general unit (19 beds), this facility
averages 26 young adults per day, overall through February
of this year.
Medicaid AS 47.07, Sec. 10(I) - $6,264,700 General Fund
Ms. Clark stated that based on this program's annual
expenditure pattern, the projected Medicaid need for
general funds for the rest of the fiscal year will be
short. She noted that in this program's weekly projection
runs, an actual shortfall in general funds is actually $9.5
million, but staff is working to reduce this number.
Mr. Labbe added that staff continues to maximize the
division's federal claim by re-coding of claims by Alaska
Natives that are served through agreements with Indian
Health Service or Tribal providers. He added that with a
Medicaid client who is an Alaska Native receiving services
through a private provider, the state receives a 100
percent federal reimbursement. He detailed the progress on
these efforts thus far for the Committee.
Senator Leman asked that when the above analysis is
conducted, in terms of someone qualifying as an Alaskan
Native with reimbursement potential, he asked if these
individuals must first qualify or is a determination made
strictly on nationality.
Mr. Labbe responded that when a person applies for Medicaid
they identify themselves as being qualified and through
private providers, the department can verify these numbers.
Senator P. Kelly asked if there were any differences in
service that a person would receive under Indian Health
Service (IHS) as versus Medicaid.
Mr. Labbe responded that the IHS package, since the tribes
have moved to compacting, is somewhat flexible based on
what the individual tribal program is willing to provide to
their beneficiaries. He mentioned an historical, basic
package that did not include some things that might be
covered under Medicaid, but there have been some expansions
of services allowed. He used the example of long term care
and noted that this is not typically included because it is
so expensive to provide. He continued that as tribal
elders work with the department to find ways to finance
these services, the state makes attempts to get the federal
government to pay 100 percent for these services at the
same time, making it more feasible that the federal
government can support this program.
Co-Chair Parnell referred to Indian Health Service
collections and noted that if the state thinks they can get
$3 million for this year, would the department look to
previous years for additional monies for reimbursement
through Indian Health Services.
Mr. Labbe responded that last year the department had an
aggressive retroactive claim effort in place, but noted
that this effort is now pretty much exhausted.
Abortion Services for Medicaid Eligible Women, AS
47.07.030, Sec. 10(j) - $300,000 General Fund
Ms. Clark stated that currently the department has $215,000
in pending abortion claims and they project $85,000 for the
remainder of FY00. She noted that Medicaid providers
rendered these obligations after the judgement of the
Superior Court in a lawsuit challenging the
constitutionality of the state funding limit. She added
that Medical Assistance has no valid appropriations to pay
these claims. She noted that this was not really a
supplemental, but a separate appropriation because the
department does not have the ability, in the Medicaid
program, to pay these claims except if they comply with the
Hyde Amendment in the Medicaid Program. She continued that
the department does not have any other valid appropriation
to pay for these claims even though the department has been
ordered to do so.
Senator Phillips asked what would happen if the legislature
does not appropriate these dollars.
LISA KIRSCH, Assistant Attorney General, Human Services
Section, Department of Law responded that currently a
contempt motion exists in the Superior Court charging that
the state is failing to comply with a valid court order.
She anticipates that if the state is not willing to pay for
these services, which have already been provided it is
likely the court will order sanctions against the state.
She added that the forms these sanctions would take are
difficult to predict, but would most likely include fines
of some sort.
Co-Chair Parnell asked Ms. Kirsch to describe the
procedural posture of this case and what stage it is
presently at.
Ms. Kirsch stated that this case first arose in June 1998,
as a complaint for declaratory judgement and a request for
a temporary restraining order. She then gave an historical
account of how this trial progressed and the issues
considered as a result. She stated that this case
generally challenged the regulation that directs the money
either from Medicaid and General Relief Medical (GRM) to
pay for these abortions. She continued that the temporary
restraining order foreclosed the state from enforcing this
regulation. She explained the procedural aspects of this
case and noted that the Superior Court ruled that failure
to fund medically necessary abortions constrains and
interferes with a fundamental right, namely the right of
privacy. She continued that the court found that Alaska's
constitutional right to privacy entitles Medicaid eligible
women funding for medically necessary abortions. She
stressed that the court did not direct that the state had
to pay for abortions, but if they paid for pregnancy
related and childbirth services, then they must pay for
these abortions.
Ms. Kirsch continued to outline at what stage this case was
at in regards to the Alaska Supreme Court hearing,
including an outline of related motions, which have been
filed to date.
Co-Chair Parnell read a footnote to the Supreme Court's
Order, dated December 30, 1999, as follows: "The injunction
does not actually compel an appropriation, rather in
effect, it simply relaxes legislative restrictions on
funding already appropriated." He thought that what the
Supreme Court was saying is that the money appropriated
into the Department of Health & Social Services had some
restrictions on it. He interpreted this to mean that the
department was not permitted to provide for elective
abortions, but the court was saying that they are willing
to remove these restrictions on the appropriated money and
if the department chooses to, they can spend this money on
abortions in accordance with the lower court injunction.
He asked if this was an accurate statement.
Ms. Kirsch responded that she was reluctant to speak for
the justice who wrote this footnote. She felt as though
Co-Chair Parnell's interpretation was a reasonable one.
Co-Chair Parnell noted that the department had requested
$300,000 to provide these services and in effect he
wondered if this did not undermine the state's legal
position on appeal.
Ms. Kirsch responded by walking the Committee through the
"separation of powers" issue, which the state had used to
argue their case based on the fact that the court should
not be able to re-appropriate funds. She continued to
outline for the Committee those additional issues the state
has made to argue this case. She noted that under the
Separation of Powers Doctrine, the court does have the
ability to intercede except under exceptional
circumstances, but the court does not have the power to
order an appropriation.
Co-Chair Parnell asked again, that if the legislature chose
to fund this request, would the legislature not be
undermining their legal position on appeal.
Ms. Kirsch responded that she did not believe so. Her
position thus far, has been that there is no funding
currently available and that the court cannot appropriate
or re-appropriate those monies set aside. She summed up
that if the state complies with the court order and the
state prevails on appeal, the state will have some
recourse. She continued that if the state is not in
compliance with the lower court order in the interim, the
state faces the issue of contempt. She added that within
the framework of "separation of powers," she did not
believe a special appropriation would undermine this, since
the appropriation in this instance is only for a finite
period of time. She stated that by the department coming to
the legislature, they have shown that they have made every
effort to comply with the court order, receiving an interim
amount of funds to stay in compliance with the lower court
order until the appeal can be completed.
Co-Chair Parnell referenced the invoices, which make up the
$300,000 request, and asked what range of dates did they
reflect.
Ms. Clark responded that these started after the Superior
Court decision of last April when the department commenced
accepting and pending claims, but not paying them. She
noted that she would let the Senator know what the service
dates were for these.
Senator Leman added that he would like in addition to the
list of service dates, also invoices, and who was invoiced.
He noted that the witnesses had been using some terms
interchangeably, which caused some confusion. He referred
to the backup regarding the definition of therapeutic
abortions, and noted that the $300,000 request was for
elective, not medically necessary abortions. He continued
to define the difference between medically necessary and
elective abortions.
Ms. Kirsch noted that there was a great deal of difficulty
associated with the terms therapeutic and medically
necessary abortions. She continued to discuss her
perspective on differences between these two definitions.
Senator P. Kelly noted that it was his understanding that
therapeutic abortions were also elective. He then referred
to the "separation of powers" issue, and clarified that the
judge in the Superior Court has said that if the department
can find the money, the department is allowed to fund these
abortions. He wondered that if these abortions are an
absolute right, why the department has not made the
necessary appropriation.
Ms. Kirsch noted that the department's monies are
appropriated for specific purposes. She noted that none of
these funds are available for abortion purposes and she
added that this was the reason why plaintiffs targeted
Medicaid money.
Senator P. Kelly responded that he appreciates how the
department has handled this issue thus far. He felt that
if the court fines the department as a result of this
litigation, the legislature should take money out of the
court's budget, since he felt that this case was such a
bold violation of "separation of powers."
SFC-00 # 38, Side A
Ms. Kirsch outlined for the Committee the briefing schedule
related to this litigation.
Senator Green asked if it was not true that federal
Medicaid does not pay abortions.
Ms. Kirsch responded that no, Medicaid only pays for those
narrow exceptions, such as rape, incest and a life-
threatening situation for the mother. She added that the
state must also pay for these types of abortions in order
to qualify for federal funding.
Senator Leman requested from the department, the number of
these exceptional abortions performed.
Ms. Clark responded that she had this information for FY99.
She noted that during this period Medicaid paid for 18
abortion totaling $11,065. She continued that one of the
reasons the department believes that they do not have funds
available to comply with this court order, is that they
have such a long list of other supplementals, as outlined
previously. She concluded that this reflects a short-
funding situation.
Child Care Benefits, AS 47.27.635, Sec. 10(k) - $1,500,000
Federal Authority
Ms. Clark stated that the department would use a
reimbursable service agreement to transfer this money to
the Department of Education for their short funding in the
childcare subsidizes program. She explained how this would
work.
Energy Assistance Program, AS 47.05.010 Sec. 10(l) -
$1,767,700 Federal Receipts
Ms. Clark stated that the department could not keep up with
President Clinton's announcement of additional emergency
contingency funds available for the "Home Heating Program."
She noted the related national formula that allocates these
dollars is based on how much a state spends for heating
expenses. She added that with the Northeast experiencing a
cold winter, Alaska has received a smaller portion of these
monies through this national formula.
Senator Phillips asked about the income limits related to
this program, and asked if there were any exceptions, such
as the permanent fund dividend.
Ms. Clark responded that this was a totally federal funded
program and that she would have to get back to the senator
on this issue.
Co-Chair Parnell asked if this request would eventually be
less than $1.7 million.
Ms. Clark responded that this amount would be more at a
total of $2.361.1 million.
Ms. Clark continued that there were several miscellaneous
supplementals to consider, but noted specifically the
Foster Care program. She added that this supplemental
included some clients that were supposed to be covered by
Medicaid, but who eventually were not. She added that as a
result, the state must pay these costs, for such as things
as broken eye glasses, etceteras. She continued that there
were a few reconciled audits with grantees that are owed
additional money and also noted a ratification in Section 2
for an over-expenditure in the Medicaid program for FY99 in
the amount of $3.271.6 million dollars. She outlined
specifically how this supplemental came to be.
Co-Chair Parnell noted that SB 250 would be HELD in
Committee.
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